In addition to charging a % based fee, credit companies also charge a flat fee per swipe. For example, they might charge $0.07 + 3%. So if the total is $1, the fee is $0.10, or about 10% of the price. The flat fee matters less as the price increases.
This is why places have minimums for credit cards.
jaminfine t1_j2cdpfy wrote
Reply to comment by alek_hiddel in ELI5: Why is it that, at some gas stations, it’s cheaper to pay with cash instead a credit card? by tgjj530
Actually I think the reason is more like this:
In addition to charging a % based fee, credit companies also charge a flat fee per swipe. For example, they might charge $0.07 + 3%. So if the total is $1, the fee is $0.10, or about 10% of the price. The flat fee matters less as the price increases.
This is why places have minimums for credit cards.